The NYT’s Geffen Put

By Felix Salmon
May 26, 2009

Peter Kafka delves behind the New Yorker’s firewall today to look at the relationship between David Geffen and the New York Times, as reported by Lawrence Wright. The upshot is that if you’re worried about the future of the NYT, don’t be — the Sulzbergers can take all the risks they want, because they know that if it all goes horribly pear-shaped, the Geffen Put will always be there:

If the Times ever does need a deep-pocketed buyer, Geffen has made it very clear he’s available.

This is good news for all concerned, I think. The option to sell to Geffen has real value to the Sulzbergers even if they never exercise it — it essentially gets rid of the worst-case-scenario of an LA Times-style death spiral where the newspaper is owned by a for-profit owner who has no idea what he’s doing nor any respect for sacred trusts and the like.

Meanwhile, Ryan Chittum tweets that an annual subscription to the dead-tree NYT is now $811 a year. Which means that if you’re earning the $45,000 median income for New York City and you subscribe to the NYT, almost 2% of your pre-tax income is spent on your newspaper. I’d love to see a chart of the NYT’s subscription cost as a ratio of NYC median income — has it ever been this high? And what’s a realistic upper bound for that figure?

Update: Ryan now says the cost isn’t $811 but rather $770. That’s still $59.23 every four weeks, which is a 40% hike from the $42.40 which I’m currently paying; it definitely approaches the point at which only the cost-insensitive won’t think about unsubscribing.

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9 comments so far

Don’t believe everything you tweet. Per the site, a daily subscription will set you back $275 bucks. Or does Ryan Chittum live somewhere very remote? The rate I quoted is for NYC delivery.

Posted by infirm | Report as abusive

OK, I entered a bunch of different zip codes into the NYT subscription site. Seems like for most of the country outside of the NYC area, a daily subscription costs $350/yr. You can’t get it at all in Juneau, Honolulu or San Juan, but you can get Sunday only in Anchorage for $3.40/week.

Posted by infirm | Report as abusive

I’m curious about the discrepancy between the commenter’s numbers and Chuttum’s. I also wonder whether New York’s income disparity works in the NYT’s favor vis-a-vis the metric you ask about; NYT could get by on primarily the upper third of New Yorkers. So I wonder what the median income of New York household who subscribe to NYT is.

Hmmm. It’s unclear whether we should be basing whether or not a newspaper should stay in business on its status as a “sacred trust,” especially a webophobic one.

Posted by Curmudgeon | Report as abusive

I think the advertised rates are discounted rates for first-time subscribers. But I’m not sure on where the $811 comes from. That’s $62.38 every four weeks; I’m currently paying $42.40. They wouldn’t serve up a 47% increase, would they?

Posted by Felix Salmon | Report as abusive

If that $5.30/wk rate is just for new subscribers, when it’s over, let the subscription run out, and then start a new one. I did that with my FT subscription, they offer it for about $100 for new subscribers and about 2x that for existing ones. I said I wanted the new subscriber price or I would switch to a kindle subscription, so they gave me the dead tree version for ~$100.

It’s a buyers’ market out there, especially for newspapers. After the newspaper genius Sam Zell bought the Tribune, I got a call from the LA times. I was paying about $25/month for it at the time, and they said they wanted to cancel my subscription and offer me a year for $89 or something like that. OK with me. I guess their monthly invoices were costing them a lot, but then what do I know about newspaper accounting practices?

Posted by KenG | Report as abusive

“…death spiral where the newspaper is owned by a for-profit owner who has no idea what he’s doing nor any respect for sacred trusts and the like….? You mean, like the current NYT situation?

Posted by bucky dent | Report as abusive

The discrepancy on my subscription price is for three of reasons.

One, I live in DC. I’d presume this is one of the top three subscription bases for the Times, so it’s kind of strange that that subscriptions cost 26% more here than in NYC.

Two, the earlier commenters are looking at the initial trial-period price of an NYT subscription. That’s 50% off and lasts just eight weeks.

Three, the NYT subscription site still has the old prices lised, perhaps because the new ones don’t go into effect until June 1.

As an aside: Felix’s point about the NYT sub-to-NYC-median-income ratio is revealing.

It would be interesting to see the median income of a Times print subscriber, who pays big bucks, and a unique visitor, who doesn’t pay anything. I’m wondering how much the print subscriber and print advertiser subsidies democratize the paper’s journalism.

On one hand, Web users skew higher demographically. On the other hand, the NYT’s print demographics are already sky-high, at about $110,000 median. quick_links/audience.php

Sorry, demographic is available. I missed it earlier.

Median income=$85,000. online/audience/audience_profile.php

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